Community Currency Magazine May 2009

The first step for any community aiming to become more self-reliant is to establish its own currency system.
Bartering With Silver

The American Open Currency Standard
Interview
With AOCS
Creator
Mr. Rob Gray
May 2009 Digital Edition
A film by Alan Rosenblith
http://www.themoneyfix.org/
The Money Fix is now available for purchase. Visit their web site for more details.
Contact Alan at
alan@themoneyfix.org
or
follow Alan on Twitter
@AlanRosenblith
2 § Community Currency Magazine May 2009 Issue

New Local Currency Bromsgrove Principles
Projects & Efforts Page 31
Page 4
Ithaca Hours Drops Print Directory in
Successful Launch of the PLENTY, Favor of Online Listings
North Carolina Area Local Currency By Stephen Burke
Page 8 for the Ithaca Hours Board
http://www.ithacahours.org
Beat the recession, Page 33
Print your own money!
By Mark Livett Merit Exchange to Move from Alpha
Page 9 to Beta Testing
By Alex Zorach, April 13th, 2009
Statement Introducing the Free http://meritexchange.com/
Competition in Currency Act Page 33
Page 11
The Pennsylvania Pound?
American Open Currency Standard, from Wikipedia
AOCS: Interview with Mr. Rob Gray Page 34
Page 12 Stamp Scrip:
Money People Paid to Use
What’s Backing The New Detroit by Bruce Champ
Cheers Community Currency? Federal Reserve Bank of Cleveland.
Page 18 Economic Commentary,
Apr 2008
Toronto Dollar Founder Keeps The Page 35
Faith Cover
1 Troy Ounce AOCS Approved
By Joy Kogawa
Silver barter Currency for barter,
The Bulletin, Toronto’s Downtown Newspaper savings and inflation protection.
http://www.thebulletin.ca These medallions are from
Page 20 www.freedommint.com
Support Kiva Editor, Mark Herpel

http://www.kiva.org editor@ccmag.net
Page 24 Skype IM ‘digitalcurrency’
http://twitter.com/dgcmagazine
Complementary Currency & Community Currency Magazine is published
online 12 times a year.
Sustainability Subscriptions are free.
By Alex Zorach
Page 29 © 2008 Community Currency Magazine
All Rights Reserved
Community Currency Magazine May 2009 Issue § 3

New Local Currency
Projects & Other Efforts
Brixton Pound, London (UK) will always remain balanced at zero. Members are
Brixton will be the first part of London to have its own encouraged to be as active as possible, and strive for
local currency and the first urban area in the UK. a balanced “Net-Zero” account.
Web: http://brixtonpound.wordpress.com/ http://comoexchange.org/
Twitter: http://twitter.com/brixtonpound
Wairarapa Green Dollars, Wairarapa, New
“The Brixton Pound (B£) is a local currency Zealand
launching in September 2009. This is a practical WAIS Vouchers Accepted Here!
way for local people to vote with our wallets for The Wairarapa Green Dollar Exchange (the existing
a strong and diverse Brixton economy. It will be Wairarapa LETS) is introducing new cash notes that
a complementary currency, working alongside can be used to purchase local products and services.
(not replacing) pounds sterling, for use by The denomination of each note are pegged to the New
independent local businesses and individuals Zealand dollars. 18,000 vouchers are being printed with
trading within Brixton. The currency’s sterling a total face value of 76,500 WAIS, pronounced ‘wise’.
backing is held by Lambeth Savings and Credit They will be introduced slowly as members withdraw
Union (LSCU), who provide access to low the vouchers from their exchange accounts and non-
interest loans for the local community.” members purchase them. The aim is to emphasize
the availability and quality of locally produced goods
Columbia Exchange Circle, Columbia Missouri and locally owned businesses, without turning away
http://comoexchange.org/ from the benefits that a more global economy can also
An open web-based network designed to foster bring.
community interaction through the exchange of a http://www.wais.org.nz/
community currency and an online social network
designed to promote currency usage. Each member North Fork Shares, California
has a profile and may categorize their interests, post In North Fork, California, Josh Freeman is hard at work
offers & requests plus make direct exchanges. putting together a local currency in his community.
--KOMU News Story & Video, http://su.sg/62a3 They already have a detailed web site up, a steering
committee, they are working towards both a web
Units of exchange are Marbles. The value of a Marble directory and a print version, plus there is even a
is flexible. It’s meant to adapt to the circumstances. potluck dinner planned. Josh tells me in email that he
General guideline is that an hour of your time is worth will keep CCmagazine up to date on their progress
about 10 Marbles. As livable wage of $10 an hour, each month. Look for NF Shares to be active later this
compare 1 Marble to 1 Dollar. Flexible. year.
http://www.nfshares.com/
Rather than create currency out of nowhere as debt,
marbles emerge out of a community exchange. When Transition Town Port Alberni, Canada
an exchange takes place, the inherent value of the At the first Transition Town meeting in Port Alberni, BC,
exchange is mirrored in marbles: one member’s Canada they discussed creating a local Port Alberni
balance rises, and another’s falls by the same amount. currency to bolster area business. Their local currency
This is the key. Marbles are an abundant resource concept would be modeled after after the Saltspring
because the inherent value in people is an abundant Island Dollar. Follow their progress on:
resource. http://www.murkyview.com
Balance is built into the Columbia Exchange Circle. Michiana MAC

Since each transaction is a mutual-credit exchange, The Michiana, Indiana community has officially named
the total number of marbles created is zero. While a their local currency. The units will be call MACs.
member may fall below zero, the Circle as a whole http://www.michianacurrency.org/

Baroon Dollar, Australia Tucson Life Cache, Arizona
Australia’s first dollar-backed community currency The word ‘Cash’ can be spelled several different
Location: Maleny Australia ways. In Tucson, Arizona, ‘Cache’ means their future
Time Zone: Brisbane local currency known as Tucson Life Cache.
Web: http://www.baroon.dollar.org
Twitter: twitter.com/baroondollar If you have ever desired to start your own community
currency, you may want to pattern your organization
“The Baroon Dollar is a community or after this one. These are some of the hardest
complementary currency in development, working, best communicating folks I’ve ever meet in
which will be redeemable for goods or services the CC world. Through their Google Groups list, they
within the Blackall Range and Sunshine have meetings, movies, discussions and now there
Coast Hinterland region. It is an initiative of is even a logo contest.
Sustainable Maleny and the Australian Institute
for Community Currencies Inc - a non-profit Here is more about the organization.
community organisation.” “In 2009 the Mission Statement: Our mission is to create a locally-
Australian Institute for Community Currencies based economy in Tucson, Arizona, that promotes
Inc. (AICC) was formed from Sustainable self-reliance, sustainability, community, fairness, civic
Maleny’s interest in fostering innovative and neighborhood pride, and humane commerce.
solutions toward maintaining a high quality of
life for all members of our community.” Top 5 Goals:
1. Identify the goods and services that have both
This local currency gets its name from the Baroon the greatest demand and the greatest potential
Pocket Dam, Blackall Range region. Organizers and to be produced locally.
participants hope that the experience of creating 2. Provide a medium of exchange for local goods
this model will stir development of other community and services that maximizes our community’s
currencies around Australia. self-reliance.
3. Create and support training opportunities for
The Baroon Dollar received some excellent media community members interested in learning the
coverage on ABC’s Radio National Program - Life skills required to produce needed goods and
Matters in April 2009. services.
4. Find simple ways to bring local buyers and
The program investigated the effects of the current sellers together through the development of
economic recession on health. Speakers included new communication tools and the promotion
Andrew Leigh (Associate Professor of Econmics, of existing infrastructure such as farmer’s
Australian National University); Professor Mark markets and Internet groups.
Harris (Executive Director, Centre for Primary Health 5. Encourage diversity within our group and seek
Care and Equity, UNSW); Professor Gordon Parker involvement from as many local community
(Executive director, Black Dog Institute). members, businesses, and organizations as
possible.
Listen to the program. http://TucsonLocalCurrency.org
http://mpegmedia.abc.net.au/rn/podcast/2009/04/ http://groups.google.com/group/tucsonlocalcurrency
lms_20090417.mp3
MegaBucks, Atlanta
How does “Nashua Nuggets” sound? Meet Alan from MegaBucks a new local currency
(New Hampsire) program starting in the Atlanta area. (notes)
In New Hampshire, over the past month there have Follow their progress from pre-launch to grand
been three editorials in the Nashuatelegraph, the opening or catch Alan on Twitter. Soft launch is July
online version of The Telegraph, 4th.
(http://www.nashuatelegraph.com/) discussing the http://www.megabucksatlanta.com/
creation of a local currency called “Nashua Nuggets”. http://twitter.com/MegaBucksAtl
It’s not surprising that all of the editorial content and
comments have been positive. We’ll look for more continued on page 6
information on Nuggests the weeks ahead.

Kenmare YOURO, Ireland forms and terms which may be very helpful for you.
Just launched May 15 is the Kenmare YOURO local Grab a copy from Stephen for just $10 and additional
currency. This is a temporary project which will run un- copies at $2.50 each. Visit their website, or call Board
til September and at that time all YOURO notes will be president Stephen Burke at Small World Music, 607-
redeemable for Euros. The Transition Towne hopes 256-0428. http://www.ithacahours.org/
that by September they will have a comprehensive
plan for a permanent currency system. For more info
see their web.
http://transitiontownkenmare.wordpress.com
Stroud Local Currency Picks a Name (UK)

Stroud Pound
As we posted back on April 19th, the Stroud team
had still been working on the name for their new local
currency. Well...they have decided to call the local
currency Stroud Pounds and have a picture of a teasel
on it. For more information you can check out their
blog
http://transitiontownstroud.blogspot.com/
Kilowatt Cards
Kilowatt Cards are gift cards which pay for 10 kilowatt-
hours of electricity in any home utility account (includ-
ing all taxes and fees). Kilowatt Cards are backed by
tangible assets, not just promises. They are issued as S.COOP coins that have been handed out to retailers who
barter for goods (e.g. firewood) which are held, and lat- run stalls at the Petticoat Lane Market (London). These
er sold to pay for the electricity as needed. The cards coins can then be redeemed for a single scoop of ice cream
are redeemable for electricity worldwide, resulting in at Monochrome, a pop-up ice cream parlor. In addition to
a store-of-value (wood) and a medium-of-exchange its various flavors, the shop also serves up a history lesson
(paper) that avoids inflation. around cooperative currency, an alternative monetary
http://www.kilowattcards.com/template/index.cfm system instituted by English collectives that date back to the
1900’s.(above)
Mendo Moola, Ukiah Valley, California (coming)
Mendocino Neighborly Notes, Certified Sustain-
able. Whether times are dire, or times are good,
a local, Ukiah Valley (Hopland, Ukiah, Redwood
Valley, Willits) currency is an idea who’s time has
come. What will it take to make happen?
1. The community of locally-owned businesses
2. An organizer who knows money
3. The Savings Bank
4. The Mendo-Lake Credit Union
5. 40 businesses with an investment of $500
each
http://mendomoola.wordpress.com/
Need Info On How To Start Your Own Community

Currency? Ithaca Can Help.
From the Ithaca Hours blog the Board president
Stephen Burke tells us that they will soon have a new
‘bona fide’ start-up kit for communities. In the mean
time, if you would like some help now, the Ithaca Hours
has a print directory with a FAQ section, membership Concept Coin. More on this next month.
http://www.sccbank.com/
Successful
Launch of the
PLENTY, North
Carolina Area
Local Currency and important to know that the ‘funny’ money requires
dollar backing at all times. What is very exciting to see
is the vision this group has leaving open the option
T he word PLENTY is an acronym for Piedmont

Local EcoNomy Tender. The Plenty local currency
is supported by a grassroots effort to promote local
to back their money with a commodity as outlined in
part C. Will that be gold, silver, biofuel or some type
of food stuff or grain? We will be keeping an eye on
spending in the heart of North Carolina’s Piedmont this currency for more exciting future developments.
region; including Chatham, Orange, Durham and
parts of Alamance, Wake and Lee counties. Section 1 Convertibility of the PLENTY
Just a few days ago the town of Pittsboro re-launched A. The Piedmont Local EcoNomy Tender
the PLENTY. Unlike the previous NC Plenty which (PLENTY) is convertible to Federal Reserve
circulated back in 2002, this new version offers Notes at participating financial institutions
an easy exchange back to US Dollars through the (Reserve Partners) at the exchange rate
local branch of Capital Bank. The current ratio for approved by the Board of Trustees, but is not
buying Plenty’s is spend $9 USD and get 10 Plenty’s. guaranteed by any person or institution.
This is an automatic 10% discount for shoppers at
participating stores. New denominations are now B. All circulating PLENTYs must be fully
available during business hours at the Pittsboro backed by appropriate reserves at all times.
branch, at 37 Hillsboro Street. The Board of Trustees will work with Reserve
Partners to assure full convertibility with
If you have ever wondered how much research and appropriate audits and internal controls.
work goes into the launch of a community currency,
7 years ago, the original Plenty team crafted a very C. The Board of Trustees may identify and
good business plan some years back and it’s still authorize other reserve commodities suitable
online. Visit: http://www.ncplenty.org/businessplan.pdf for convertibility in the interest of sustainable
This 2002 biz plan was created for the original Plenty local economic development.
with the web URL (ncplenty.org) , the just launched
new active web is at http://www.theplenty.org/ By Article by Mark Herpel
the way....”The public may also exchange “old”
PLENTYs for the newly denominated PLENTYs at
Capital Bank in Pittsboro. The new denominations
correspond directly with US dollars ($1, $5, $10,
etc.) and are taxed the same as dollars.” It is
pretty amazing, the new organization is honoring
the 7 year old non-redeemable version of the
currency.
Perhaps the most interesting item on the new

PLENTY I have found to date is outlined in their
bylaws as shown here. Parts A & B are standard

Beat the recession,
Print your own money!
Courtesy The Redcliffe Coin & Phonecard Club Inc.
The money circulates in the community rather than
By Mark Livett being siphoned off. You start to look out for local
businesses, local handymen, local suppliers who
A lthough this sounds like a good idea few people accept the local currency. This system is not new,
bother to take it up. You have to be very motivated back in the Great Depression in the 1930s an
to start up a local currency. Luckily for us, someone Austrian town called Worgl experimented with its
else was very motivated, and if it is local you are own currency, it was so successful that emissaries
after, look no further than an hours drive away in came from other countries to study the effects,
the Sunshine Coast Hinterlands. The Baroon Dollar in fact it was so effective, the banks, not liking the
(named for Lake Baroon situated between the towns competition, forced the Austrian Government to
of Maleny and Montville) is planned to début in mid close the experiment and sent the town back to the
2009, the project is a joint initiative of ‘Sustainable depression.
Maleny’ and the newly formed Australian Institute for
Community Currencies Inc. Sustainable Maleny has More recently, in the early 1990s the town of Ithaca
been going for 2 years and has over 400 members, it in New York State brought out their own currency
has recently secured Maleny’s inclusion in the highly based on a unit of an hour’s work, this system is still
renowned international Transition Town network, one going strong and has been joined by over 200 in the
of few Australian organisations to achieve this. They United States with more overseas. What does this
join the well known towns of Totnes and Lewes in the mean to those of us not living in the Hinterlands? For
UK whose community currencies has proven popular me it is an opportunity to add to my slowly growing
with collectors and eBay. collection of community currencies, for others it may
be the opportunity to start a collection before the
Anyone that has ever bought or been given a gift secondary market takes off (as it has with stamps,
card will be familiar with the concept of using local phonecards & coins) and becomes too expensive.
currencies, you get a sum of money in the form of
voucher and then you hunt around for ways to spend Buying community currency is like giving a donation
it in one shop. A local currency is similar but you to a charity, your money will go towards helping a
get to spend it in a range of shops in a small area, community in the third world (well anything an hour
generally the area in which you live . As Coles and from Brisbane is suspect) with the added bonus
Myers will not take your gift vouchers you are forced that you get a nice collectable, at face value, which
to use local shops, run by local people, your business you can also spend next time you are up in the
then supports these shops as opposed to supporting Hinterlands.
the company headquarters in NSW or Victoria.
If you would like any more information on the Baroon
As the banks won’t take the vouchers you may as Dollar head to http://sustainablemaleny.org/hindollar/
well spend them, so the money keeps on circulating, , the website is still being developed but it is full of
being used to buy groceries or pay for the services information already and eventually you will be able
of local workmen (the stereotypical businesses that to buy the dollars direct from the site.
accept alternative currencies are massage therapists
and faith healers as it appeals to people who are not Redcliffe Coin and Phonecard Club Inc.
mainstream, however in Ithaca in New York, over 10 Barramay Street,
350 businesses accept local currency either in part Manly West QLD. 4179
of full.) Also see:
http://www.baroondollar.org/

Hometown Money:
How to Enrich Your Community
with Local Currency
by Paul Glover, founder of Ithaca HOURS

http://www.ithacahours.com
$25.00 Check to:

WRC
115 The Commons, Ithaca NY 14850
or $25.00 Paypal donation at http://www.tclivingwage.org

Statement Introducing Due to nearly a century of inflationary monetary policy
on the part of the Federal Reserve, the US dollar stands
the Free Competition

at historically low levels. Investors around the world
are shunning the dollar, and millions of Americans see
their salaries, savings accounts, and pensions eroded
in Currency Act away by rising inflation. We stand on the precipice of
an unprecedented monetary collapse, and as a result
many people have begun to look for alternatives to the
Via: U.S. House of Representatives: Statement
dollar.
Introducing the Free Competition in Currency Act
13 December 2007, Rep. Ron Paul, M.D.
As a proponent of competition in currencies, I believe
that the American people should be free to choose
Madame Speaker, I rise to introduce the Free the type of currency they prefer to use. The ability of
Competition in Currency Act. This act would eliminate consumers to adopt alternative currencies can help to
two sections of US Code that, although ostensibly keep the government and the Federal Reserve honest,
intended to punish counterfeiters, have instead been as the threat that further inflation will cause more
used by the government to shut down private mints. and more people to opt out of using the dollar may
As anti-counterfeiting measures, these sections are restrain the government from debasing the currency.
superfluous, as 18 USC 485, 490, and 491 already As monopolists, however, the Federal Reserve and
grant sufficient authority to punish counterfeiters. the Mint fear competition, and would rather force
competitors out using the federal court system and the
The two sections this bill repeals, 18 USC 486 and 489, threat of asset forfeiture than compete in the market.
are so broadly written as to effectively restrict any form
of private coinage from competing with the products of A free society should shun this type of strong-arm
the United States Mint. Allowing such statutes to remain action, and the Free Competition in Currency Act would
in force as a catch-all provision merely encourages take the necessary first steps to freeing the market for
prosecutorial abuse. One particular egregious recent competing currencies. I urge my colleagues to support
example is that of the Liberty Dollar, in which federal this bill.
agents seized millions of dollars worth of private http://www.house.gov/paul/congrec/congrec2007/
currency held by a private mint on behalf of thousands
cr121307h.htm
of people across the country.

American Open Currency Standard
AOCS
Meet Rob Gray, he’s the creator and operator of the with their own personal or corporate brand and logo.
American Open Currency Standard. The AOCS is The open currency standard allows users to create
an amazing new organization who’s goal is to bring their own private silver barter money which is easily
back real trading, assets for assets. Their tool to exchangeable with other barter groups. One ounce
bring about this change is the one Troy ounce silver of fine silver is equal to one ounce of fine silver, no
medallion or as it is sometimes called a ‘round’ bar. matter who’s brand appears on the bar.
While the silver is round and looks similar to a coin,
only the government has the right to create “coinage” In the last two years the U.S. money supply has more
these beautiful pieces might also be known as barter than doubled. The the government and the Federal
tokens. Reserve have spent, lent or guaranteed $12.8 trillion,
an amount that approaches the value of everything
Rob’s web site makes a bold statement regarding the produced in the country last year. That money works
American financial system, it reads “No one is going out to $42,105 for every man, woman and child in
to fix this for you: it’s time for you to do something the U.S. and 14 times the $899.8 billion of currency
about it.” I agree. in circulation.
In this statement lives the concept of privately issued No one in government is going to fix this problem for
money whether it’s local currency, barter tokens or you!
privately issued digital gold currency. These products
all bring together like minded people and facilitate AOCS approved silver provides a private sound
extraordinary and every day trading opportunities. money platform for trade, savings and the accumula-
AOCS approved silver goes even one step further tion of real wealth protected from inflation.
by offering standard universal silver unit for trade
and also allowing anyone the option to create units Here is my interview with Mr. Rob Gray.

What is the American Open Currency Standard
(AOCS) and how does the mission statement
read?
The American Open Currency Standard exists to

expedite the implementation of Silver as money. The
AOCS is a temporary bridge between the world of
government-imposed fiat currencies and a free market
system where commodities and other stores of value
are actively traded in the MarketPlace. It is our ultimate
goal to see goods and services once again priced in
ounces, grams or grains alongside variable “paper”
prices. When this is true, we will know that our mission
is successful.

When did the AOCS get started?
The concept for the AOCS was hatched in November
of 2007 after an in-depth study of the Liberty Dollar
model, its strengths and challenges. The AOCS has yet
to officially “launch” with a nationwide PR campaign. please. As the Liberty Dollar is presently trading a one
ounce round for a value of “twenty”, I imagine most
What’s Wrong with the U.S. Dollar? Merchants accepting AOCS Approved are also happy
Runaway government deficit spending has no oversight to accept Liberty Dollars. I do not think, however, that
with a paper currency. The US dollar is no longer based this works the same way in reverse, though I don’t
on an amount of gold, but instead is created based on know of any uniform centralized directory of Liberty
the production limitation of the fastest printing press. Dollar merchants.
From the AOCS web site, I read: A lot of our readers support and use the Liberty
Dollar. Is the AOCS sort of a clone of the LD
“At the present moment, the AOCS trade organization with the sort of base changes in face
group exchanges a 1oz .999 fine silver value?
piece at a value of “fifty”. This means a I desribe the AOCS model as “the Liberty Dollar
merchant is willing to exchange fifty dollars on steroids”. There are many similarities and a few
of goods or services for a 1oz AOCS round.” significant differences between the two:
How many merchants are trading 1. Both systems use the same
now using AOCS approved formula to calculate valuation
metal? changes
Presently, Merchants are 2. AOCS Currencies do not “move
categorized by their acceptance down” in value
of either “barter” or “AOCS 3. AOCS is a decentralized
Approved”. network, allowing anyone to create
a Silver Currency. When they follow
Only a few thousand Merchants the 2 guidelines (use an approved
directly accept AOCS Approved Mint, and reference the current
Silver directly at their place of “Series C” valuation or no value
business, while the other Merchants and just a weight and purity), they
accept payment in barter. We can may call their new Currency “AOCS
actively trade with any “barter” Approved”. This eliminates any
Merchant after converting our Silver single point of failure in our system.
one-to-one with the preferred barter currency. 4. AOCS invites everyone to purchase our Currency
at a discount, not just “Associates” or “RCO’s”. Our
Are the merchants also Liberty Dollar merchants? suggested retail price at the moment (increases
A Merchant is invited to accept any currency they June 15th) is market “ask” + 5.50 per 1oz proof-like

medallion, minimum order of 20oz. Recently, LD currencies?
updated this as well. The qualifications for calling your Silver currency
“AOCS Approved” is as follows:
I have a multiple choice for you....are the AOCS
Complementary Currencies: • Use an AOCS Approved Mint for blanking and final
• Legal Tender strike
• Lawful Tender • Reference the label “AOCS Approved”
• Local Tender • Use a face value that matches the current “Series
• All of the above C” valuation of “FIFTY” or have no face value, just
• None of the above a weight in oz or grams and purity, ie “1 oz .999
In my opinion, the best answer is “None of the above”. Fine Silver”
The closest match is Lawful Tender, as this begs the
question of the inherent difference between legal Anyone that produces a coin that meets these criteria
and lawful. In my opinion, barter currency or private is invited to call their Currency “AOCS Approved”.
currency are a little closer to my belief. However, the AOCS reserves the right to choose
which approved Currencies to list on the website. For
What is an ‘AOCS Currency Officer’ and what example, we may choose that listing the “KKK” coin,
makes up that job or what occurs in his daily AOCS should it ever come to existence, may not be in the
business? spirit of our organization.
An AOCS Approved Currency Officer is our extension
to the local community. Since this question was posed, I know U.S. citizens (friends) who:
the OpenCurrency.com page has been expanded to
address this at http://www.opencurrency.com/currency- • go to work each day
officer.php Essentially, it is up to the CO to expand our • have their paychecks automatically deposited
Merchant MarketPlace and facilitate exchanges with in the local BoA
the public. • use their credit cards to shop at Wal-Mart
• charge their gas purchased each week on
Are you planning any conventions or public events plastic
next year where like minded people could meet, • contribute to their retirement account
trade and discuss the AOCS and sound money? • have 2 happy children and a mortgage
We are a platinum sponsor of “FreedomFest” in Las
Vegas. Check out for details. They have never invested in precious metal and
http://www.freedomfest.com/exhibitors.htm
There is a lot of excitement online about the Free

Lakota Bank. Is it really a licensed bank?
No, the FLB is a private Silver and Gold depository.
What is the exact is the relationship between the

Free Lakota Bank and the Republic of Lakotah?
There is no relationship.
Are these AOCS approved pieces one standard

ounce or one Troy ounce?
Silver and Gold, as an industry standard, are
measured in Troy. All AOCS Approved Silver
and Gold coins are measured in Troy Ounces.
Is it possible for some person to just show

up one day with their own 1 Troy ounce silver
previously minted medallion and become and
AOCS approved currency? How does a group
or person get their own silver piece enlisted as
one of the participating AOCS approved silver

never even considered using anything other than be credited to serious deflation, falling crude oil prices,
the good old U.S. Dollar. They often look at me as and government manipulation in the metals market
if I am a crazy person for extolling the benefits of (rationing and other “paper” tricks).
real money.
I have faith in the masses. I don’t refer to them as
As I understand it, these people are NOT your target “sheeple”. I believe they simply have yet to reach the
market. Trying to convince someone from this type critical point where reason and logic kick back in and
of lifestyle to also use silver as money...that’s very they join the rest of the “well-informed citizenry”. Most
tough. change comes only after a certain level of pain is felt.
Who do your products appeal to? What group or groups of people are buying your
I strongly disagree. In fact, if we are to succeed at precious metal products and who is your target
“waking up” the masses, we must create a product that market?
appeals to them. My first shot is to show the attached Most buyers at the moment are private collectors and/
chart (Savings.pdf). It demonstrates the value of a or those that sympathize with the Revolution. We
“savings account”, if you were to set aside $100 per are rapidly expanding outside of that demographic
week over the last 11 years and 4 months (it goes with charities and other groups that benefit from the
back to Jan1’98). The 4 options are saving the $100 introduction of our silver Currency.
as “cash under the mattress”, cash in a 2.5% savings
bank account, a 401k or investment account that tracks Do you have an additional digital system where
the S&P 500, and purchasing $100 of physical silver silver backed AOCS units could be transferred
each week. instead of shipping the metal like e-AOCS.com ?
Yes, we are working on a system in conjuction with the
A standard question that comes up with this chart is Free Lakota Bank to handle electronic transactions.
“what about the big drop in silver’s value”. That can Further, we’re developing a central clearinghouse so that

other groups can establish banks, and yet depositors penetration in the United States is MASSIVE. How
can still send funds between various institutions. many ‘members’ or participants would you say the
AOCS operation has right now?
I saw The Freedom Mint in the list of AOCS Our group is quite small, and limited to a few thousand
currencies. The Freedom Mint is the Gold and buyers at the moment. However, we project to have
Silver custom minting arm of RestoreTheRepublic. more than 250,000 Merchants world-wide and a
com. I like their products. How is The Freedom Mint BILLION in our economy by the end of 2009. Sound
associated with the AOCS? impossible? Time will tell!
The Freedom Mint produces an AOCS Approved barter
round. Have you done any print advertising?
No, but will in conjunction with our official “launch”.
With the seizure that occurred at the Liberty
Dollar organization, their precious metal, minted We have some ideas for products and design. I
medallions and die sets....don’t you anticipate that might consider adding our products to your AOCS
the evil Federal Government will do the same to list of currencies. What are the requirements of
your network? the precious metal piece to become approved or
No, our goal is to operate “under the radar” for some integrated into the AOCS system?
time, and when we officially launch, it will happen Talk to Eddie and he’ll set you up.
with such force and magnitude that any government
response will be futile. And you can tell them I said Can anyone join up and be included, how do I
so. join?
Join...as a Currency Officer? Our present requirement
Do you have a plan of action to avoid such a seizure is that you purchase 100oz of AOCS Approved Silver at
issue and legal action? spot + 4.50. Then, you may claim ownership of a City,
First, we don’t put the word “dollars” on our pieces. and have 30 days to complete the objective required
Simple, but it helps prevent confusion in the to manage the territory. David (david@opencurrency.
MarketPlace. Second, we encourage supporters to com) will help you get going.
shop and circulate Silver in our private network, as
opposed to the Liberty Dollar strategy of “doing the I know you were recently interviewed on the radio,
drop” and convincing / tricking the merchant to accept what station was that and how was the interview?
the silver under the auspices of the Federal Reserve. It was on the Michael Badnarik “Lighting the Fires
Finally, there is no single point of failure in our system, of Liberty” program on WTPRN.com. It may still be
so one action would be unable to shut down our archived there.
operation.
A few years back in the New Hampshire State
What is the Silver Buyers Club and can anyone Legislature there was a Sound Money Bill asking
join? for the use of Gold/Silver U.S. minted coins
The Silver Buyer’s Club is an invitation for groups (or their digital equivalent) to be used in daily
and communities to aggregate purchasing power to transactions for payables/receivables between it
decrease the premium when buying Silver. The more (the state) and the inhabitants and businesses in
the group buys, the lower the price. SBC managers New Hampshire.
set the terms for participation, from a single ounce to
20oz minimums. Do you favor this type of legal attempt to integrate
real bullion into daily life with the U.S. Government’s
Is it possible, if I wanted you to create a medallion Federal Reserve banking system or is it more
for my group with my custom design on it, can you appropriate to simply create and use local and
arrange that for us? national private systems?
Of course! Talk to Eddie Allen, International Currency I am cautiously optomistic regardings these attempts.
Director for details at I am in favor of the concept, but am curious about
eddie@opencurrency.com. needing a law to participate. For example, if I choose
to accept payment in silver or gold, I may do so without
I really admire your concept of sound money and the governments permission. Then, I may choose to
I agree paper IS poverty just as Thomas Jefferson liquidate some of my silver or gold so that I can pay my
said but we are not yet a majority and credit card taxes. Again, I don’t need the government to grant me

permission to do so. Do you offer a monthly nationwide newsletter
or magazine which feature your merchants and
HOWEVER, if the government and its associated users? Would you like one?
cartels become involved in this process, the forces What a great idea. Bring it on.
placed upon the market will hurt those like me that
want to be left alone. For example, if my taxes are On the Open Currency web site, there seems to be
payable in USD, and the state says “we’ll accept gold a merchant directory area but I could not access it.
at the market rate on the day your tax is due,” what How do people get signed up to access this area?
happens if the “market” price of gold drops through It is available now to the public.
the floor on that very same day, in anticipation of this
event? Sound strange? I have visited the NeoCoins web site http://www.
theneocoins.com/ and I had to laugh...what a
So, just when the time comes to pay my tax, the value concept! The ‘Dick Cheney’ is sure to be a real
of my gold or silver mysteriously drops 10-20%. While classic, that’s Mr. Evil himself pictured right on the
those moves are not uncommon, it won’t be hard to front. I understand why it’s sold out. If I wanted to
imagine the gov’t could interfere with the marketplace market these pieces through my network of web
to create a depression of metal value at the very same sites or publications, do you have an affiliate or
time I need to use it. referral program?
Also a great idea. I think one is established but not
HOWEVER, this situation would be avoided if the presently operational. I could use some web help to
gov’t would quote taxes in silver or gold, so that the get it going!
varied value won’t matter when it comes time to pay.
Essentially, my belief is that any proposed system that How much silver do you have in your pocket right
trades metal at “market value” will steal from those now?
involved. I frequently carry 6 samples of AOCS Approved
Currencies. My personal Silver collection is quite
I understand better than most, that business over limited, as I use it to help fill orders. More will come!
the Internet does not require a big office and all
the expenses which accompany that set up, but I I’d like to thank Rob for answering my questions
could not find any street address or business type and wish him the best of luck. I firmly believe that
license anywhere on the web site. the country should permit the use of gold and silver
alongside fiat money.
Where is the AOCS located and do you have walk
in offices? Interview by Mark Herpel
The AOCS is run from my home office, and the home
offices of the CO’s across the country.

What’s Backing The New Detroit Cheers Community Currency?
“We hope this system encourages sustainable community economic awareness, or in the vernacular –show
some love to your neighbors”.
W hen you visit a new town you may quietly say ‘wow’ as you drive past shiny new buildings or manicured
green parks. You may be doubly impressed and say ‘hey look at that’ as you work your way though the city
streets and neighborhoods. Beautiful homes and clean streets (pretty places) definitely gives off what most people
describe as the patented ‘what a great place to live’ feeling.
Well... don’t be fooled by appearances. You can live in Beverly Hills or Palm Beach and still want to hang yourself
because your life sucks!
Ultimately what makes a town or city

great are its people.
My choice? I’ll take the hard working,

blue collar downtown crowd any day
over some ‘fancy - smancy’ Lexus
driving, latte sipping, wet behind the
ears Vegan.
My preference is an old Cadillac, a

cold beer and a cheeseburger.
Sorry, Santa Barbara, keep your

expensive dry cleaning and clean
ocean air, nothing personal, I
preference is good music, old friends,
cold beer and Detroit. Rodney Atkins
has it correct, “These are my people”.
As the economy slows and jobs

disappear, Detroit residents are
taking action to strengthen their local
economy. A group of small business
owners have recently created their
own Detroit community scrip monetary
system (local currency) and in the
process has garnered more national
press than Joe Biden’s first 100 days.
Let me introduce you to these local
entrepreneurs.
There’s Jerry Belanger who owns the

Park Bar.
Jerry recognizes that ‘success’

in their community comes when
local businesses work together
complementing each others products
and sharing customers. When the

Macy’s Santa sent customers to the New York Gimbals, both stores ended up boosting sales and Jerry recognizes
this fact.
John Linardos of Motor City Brewing Works
John knows that the growth and long term viability of this project will require a diverse group of businesses to
accept the local scrip. This is the recipe for success enjoyed by all other successful community currencies. The
wider variety of local businesses which are included in the operation, the better the circulation of the currency.
In other words, the money will be spent, re-spent and spent again within your area thus increasing business.
Community currencies such as local Detroit Cheers do not earn interest and hold no value to someone who wants
to hoard the colorful notes. Keeping the local money circulating in the community over and over again is the goal
of Detroit Cheers.
If you shop at Walmart, McDonands or Starbucks a large portion the dollar you spend (.$80-$.90) immediately
leaves your local area never to return. Great for China, bad for Detroit!
The idea is a simple one and

in the Detroit area residents
definitely understand this concept.
I’ll wager that there are a lot
more Chevrolets on the streets
than there are Hyundai’s in this
Michigan metropolis. The local’s
‘get it’...buy goods and services
that are produced locally and
boost the local economy. The local
sustainability idea is highly effective
with everything from cars to carrots
and a community currency helps to
expand local sales.
Tim Tharp of (Foran’s) Grand Trunk

Pub
Tim Tharp sums up the attitude of

many people in this failing global
economy when he says, “Detroit
has always been an enduring town
… ‘fuck you all, we’re going to
survive anyways’ kind of attitude.”
Sustainable local economies do
not falter as the value of foreign
currencies change. An earthquake
in Central China, should not change
the price of seafood in your local
area.
I hear this all day long from readers,

“you can keep your globalization,
we find strength in our families
and neighbors. Our community
shall remain strong and we will
prosper.”
by Mark Herpel

Toronto Dollar Founder
Keeps The Faith
Photo credit of
HiMY SYeD Photopia
The forecast is that some people, perhaps some of our
children and grandchildren, will survive. Those who do
will need tools.
By Joy Kogawa
April 22, 2009 For the last 10 years I have been part of a world wide
The Bulletin, Toronto’s Downtown Newspaper citizens’ action known as the community currency
http://www.thebulletin.ca movement. Throughout the world, visionaries and
pioneers are day by day, quietly, faithfully trying to build
At a recent conference on climate change, experts social and economic systems for improved community
and scientists declared unequivocally that catastrophic health. This may at some point, translate into a tool
times are upon us. One physicist at the University of for community survival. The idea is simple: we can in
Toronto said it was already too late. The Titanic has our communities, create a form of money, based on
hit the iceberg. Huge disasters of climate change have co-operation and caring, rather than on scarcity and
already arrived and more are inevitable. competition, based on community interest and not just
self-interest.
Given this news, many of us on the deck of the Titanic,
continue to dance and feast our lives away as usual If we can build such structures now, they may evolve
while the waves quietly rise. For the moment we hold into more effective tools for the children of the future.
back the looming spectre. Others are attempting to People in systems based on values of caring will have
create life rafts, breaking the deck chairs apart with at the very least, a measure of community health
bare hands, looking for ropes to tie them together. Still and be more likely to develop the moral strength and
others are looking about bewildered and in despair, inner resources with which to face the fearsome days
neither waltzing nor working. It is the latter category, ahead.
people not in denial that I wish to address. I believe
that the difference we are each able to make begins Around the world and in Canada, there are many
with the tiniest decision. It can be as life changing as different types of community currencies, like the LETS
an effort to befriend an enemy or as small as choosing system started by Michael Linton on the west coast. In
to waste less water in the bath, turning off the light, Toronto, we have the Toronto Dollar. At the moment, it
recycling more carefully, using no pesticides or bleach, is weak. But it is still alive. And in the powerful hands
traveling by public transit, using community currency, of the love that resides in the human condition, the
living simply etc. One small deliberate act empowers system may yet become more visible.
us and propels us to further steps.

“Tarek Saab has begun something that
many of my friends and associates have
talked about for years!”
David Morgan
“Thank you for showing others how to do it

right!”
Jason Hommel
“GoldandSIlverNow is helping to solve the

shortage in the precious metals market!”
Fort Worth Business Press
WELCOME TO THE FREE MARKET!

Sellers get the best value for their bullion.
Buyers receive their metal immediately.
Simple as that!
www.GoldandSilverNow.com
My involvement with community currencies began John had, in the meantime, initiated the forming
in 1995 after the publication of my novel, “The Rain of an umbrella organization called St. Lawrence
Ascends.” The last sentence of the novel (in its first Works, comprised of businesses, churches,
edition) was, “The journey will lead into the abundant community organizations, theatres and schools in the
way.” I was wondering what that sentence meant, neighbourhood. The Toronto Dollar was adopted as
when a friend told me about community currencies. I one of the projects under this umbrella.
began to explore the idea. I knew there was something
deeply disturbing about our society’s obsession with In 1998, we hired a designer, Steve Yeates, and printed
money, with not having enough, with scrambling and $300,000 worth of Toronto Dollars in denominations of
competing for it. This way of life was far from the path $1, $2, $5, $10 and $20 in green, pink, blue and yellow.
Photo
credit of
HiMY
SYeD
Photopia
of abundance. It was, in fact, a path of scarcity and This cost us about $5,000 that was provided as a grant
of constricted hearts. I wondered if engagement with by a friend. We based our design on a photograph of
community currencies could lead to a healthier, happier old Toronto and decided to use historic buildings on
mindset. one side. Our bills contained serial numbers and our
initial two printings both contained expiry dates. The
My former partner, John Flanders and I were for awhile most recent printing does not bear an expiry date.
vigorously engaged in trying to set up a LETS system
in Vancouver, in which people exchange goods and Our plan was to exchange Toronto Dollars, for Canadian
services and the transactions are recorded on an dollars at par with citizens: 10% of the Canadian
accounting system. This enables people with little dollars received would be placed in a community fund
money to be engaged in economic activity. We held a for the use of community organizations, 90% would
number of meetings in homes, in community centres be put aside for merchants and businesses who
and churches and built up a list of participants. But we wished to redeem the Toronto Dollars they received
were unable to engage any businesses. And slowly, from customers. Merchants also had the option of re-
the system of accounting became unsustainable on spending them with other businesses or using them as
volunteer labour and energy dissipated. After moving to bonuses or in exchange for labour.
Toronto, we met with some community-minded people
in the St. Lawrence area in the historic commercial David Walsh, a philanthropist and well-known
neighborhood now called Old Town Toronto. For over a businessman, was well connected with both the
year with people coming and going, we studied various business world and with community organizations.
community currency systems, particularly Ithaca Hours He became the first treasurer and did much of the
which uses a paper currency. We discussed pros and arduous work of signing up businesses. The first
cons and at one point, made a decision to leap in and business he approached was the Hot House Café,
learn by experiment and experience what we could not a highly successful restaurant which is owned by a
learn through discussion and study. very community-minded man, Andrew Laffey. David
Walsh and I then approached Jorge Carvalho, who

was managing the St. Lawrence Market: Jorge is an wonderful couple, Kristine Bogyo, a marvelous cellist
exceptionally visionary leader and he enthusiastically and her husband, Anton Kuerti, Canada’s foremost
agreed to participate. He signed up most of his concert pianist. That night, Anton Kuerti became the
merchants in the market. And through the additional first person to engage in Toronto Dollar transactions by
energy of Frank Touby, who with his wife Paulette own exchanging his CDs for Toronto Dollars.
the local newspaper (formerly The Community Bulletin,
and now The Bulletin ). many more businesses signed In December, 1998, Toronto’s then mayor, Mel Lastman,
up. Both the Hot House Café and the St. Lawrence launched the Toronto Dollar to much media attention in
Market have continued to this day to be the most active the St. Lawrence Market. In the years that followed,
partners. we continued to experience the Toronto Dollar as a
“work in progress.” We held a press conference to
In November of 1998, we held our first fund-raising publicize our first grant of a thousand Toronto Dollars
event at the Church of the Holy Trinity, featuring a to the Metropolitan United Church’s Out of the Cold

loans that change lives
www.kiva.org
K iva.org is a non-profit that is revolutionizing the fight against global poverty

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$25—to low-income entrepreneurs in the developing world. Most of the poor in
developing countries are self-employed entrepreneurs and a small loan to purchase
business-related items such as sewing machines or livestock can empower them to
earn their way out of poverty.
$25 loaned so far HOW DOES IT WORK?

$375 still needed Kiva brings together lenders and worthy enterprises on the web.
$25 LEND NOW From Kenya to Ecuador, microfinance institutions (MFI) around the world go to
Kiva.org and post photos and profiles of low income entrepreneurs in need of
money for their businesses.
Loans made easy and personal.

“Innovation Lenders go to Kiva.org and browse through profiles of low-income
of the Week: entrepreneurs—a dairy farmer in Kenya, a man who wants to open a shoe shop
Kiva.org uses smart design to in Honduras, or a tailor in Bulgaria. Lenders can then loan as little as $25 to the
make a little cash go a long entrepreneur of their choice via PayPal, a globally recognized online payment
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“Revolutionizing
When a loan is funded by individual lenders, Kiva pools the money and
how donors transfers it to a Microfinance partner who handles distribution and
and lenders in the US are collection of loan payments.
connecting with small Journal updates keep the lenders informed about the progress of the
entrepreneurs in developing entrepreneur they sponsored. Loan repayments made by the entrepreneur over
countries.” the course of about 6-18 months are sent back to Kiva by the MFI partner.
“If you’ve got Once loans are repaid, Kiva users can choose to withdraw their principal
25 bucks, a PC or re-loan to another entrepreneur. (80%+ of Kiva lenders choose to re-loan!
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“At
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a schoolteacher in Kansas Kiva Shows You Where Your Money Goes
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seamstress in countries like WHO your money goes to, WHAT they are doing with it, and HOW you are making
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Kiva is a regisitered 501(3)(c) non-profit based out of San Francisco, CA
.
program. We assisted in the staging of a number of Barbara Hall, our former mayor, has been handing
highly publicized events, such as the Global Roots out the awards every year. We currently have the
Festival, primarily in and around the St. Lawrence use of a very large Outdoor Broadcast Network sign
Market. With our volunteer participation, we assisted at the busy corner of Yonge and Richmond streets,
in the planning and execution of the first highly through which we advertise our existence for 10
successful Customer Appreciation Night and Toronto seconds every three minutes, 400 times a day.
Dollar party at the St. Lawrence Market, attended
by 5.000 people, including media personalities and Through personal donations and a Trillium grant
politicians. At this event we handed out small grants we have from time to time hired staff to deepen
to about 20 community organizations. Governor and expand the concept. One of our staff, Elizabeth
General Adrienne Clarkson, as her first official Verwey, was able to enlist the management of
public act, visited the Toronto Dollar booth and used Gerrard Square Shopping Centre, east of the St.
Toronto Dollars. We held more fundraising concerts. Lawrence Market. Several events were staged there
We ran a Toronto Dollar Reading Series in a local to publicize the Toronto Dollar and for a while we had
restaurant. We held a press conference at the CIBC the participation of most of the businesses at Gerrard
to announce their participation and their small grant. Square. But with the change of management, we
We initiated a “Count-me-in” campaign focusing on no longer have their full participation. We were also
assisting the children attending the St. Lawrence briefly in another shopping centre in the west side of
Community Recreation Centre and managed to raise Toronto where two of our board members lived. They
enough funds to enable children to attend camp in have since moved out of the city. Individual board
the summer. members have also made sporadic attempts to spread
in other areas but these initiatives lacked the dense
Over the years we have evolved through many community networking and the concerted effort that
waves of energy. The Spirit at Work project engaged has been expended in our birthplace. We have had
a number of community organizations using Toronto meetings with city councilors and staff, with officials
Dollars as thank-you gifts for people offering any form of several banks, with neighborhood organizations
of caring services, such as helping to carry groceries and in condominiums, cooperatives and other high-
home for an elderly rise dwellings. Our
person. We held core efforts have
monthly Toronto remained in the St
Dollar Supper Lawrence area. In
Clubs with an my estimation, the
average attendance relative success of
of 40 people. We our endeavors in
began an annual the St. Lawrence
awards ceremony Neighborhood has
that featured the been dependent
Frankly Bob Awards on long-term
for excellence in friendships and
literary and visual relationships that
arts for survivors of are established and
long-term poverty. have grown there.
This has now
been expanded Through these
to include music. networks, the
There are also the Toronto Dollar
Elaine Hall awards continues to
for the Caring be useful in a
Services, Social small way. For
Justice awards, example, St. John’s
Jennifer literary Bakery regularly
awards, awards exchanges a
to merchants for thousand dollars
their participation. every month and
26 § Community Currency Magazine April

May 2009
2009Issue
Issue
the Toronto Dollars are used to supplement the below this amount.
income of one of their employees, a single mother,
who is a recipient of social benefits. Since Toronto The work of the treasurer is indispensable to the
Dollars is legally a gift certificate, people of low existence of the Toronto Dollar and thanks to the
income who are recipients of social benefits are able dedication and loyalty of Richard Hotta, a chartered
to receive Toronto Dollars without being penalized. accountant and successful businessman, we continue
The potential for the St. John’s Bakery model to be to survive. Every second Tuesday, he redeems
duplicated by other businesses has been the driving Toronto Dollars for the merchants, at the Market.
vision behind the current “Single Mother’s Project”
in St. Jamestown, where Barbara Bouck is working Our dream of enlivening the citizenry and local
to establish a network of support with the hope of neighbourhoods, of building new economic and
benefiting single mothers in the area. social bridges among different categories of people,
and engaging community organizations with local
In almost a decade of existence, we have had a businesses, has had only a very small measure of
number of executive and board members who have success and remains for the most part, a dream. It has,
served with varying degrees of commitment as in many ways, been easier to gain the participation of
volunteers. We have also had the help of pro-bono businesses than of citizens. Only those with a pioneer
lawyers at Baker McKenzie who assisted us with our spirit are willing to expend the extra time and energy
legal needs, our incorporation and recently with the it takes to obtain and use Toronto Dollars. We have
establishment of the Community Counts Foundation, lacked the ongoing publicity to create awareness of
a charitable arm of the Toronto Dollar. the ways Toronto Dollar benefits individuals and local
communities. People are for the most part, trapped
At our most recent annual general meeting, the within the scarcity mindset and have little energy for
following executive was elected. Hugh Reilly, volunteering to help. It is easier to wait for government
president, Himy Syed, vice-president, Jim Boyles, to act and to walk by the homeless person than to
secretary and Richard Hotta, treasurer. We are help to build a system where such issues might begin
hopeful that Toronto Dollar will benefit from the to be addressed. But as we continue to survive, the
energy of the two new executive members, Hugh idea that we are not helpless and hopeless may enter
Reilly and Himy Syed and remain anchored by the a few minds, making the action of the Toronto Dollar
proven commitment of Jim Boyles and Richard part of the antidote to what has been termed, “the
Hotta who renewed their terms. The addition of cult of impotence.”
new board members: David Burman, the founder of
Toronto’s LETS system and one who has been for In a world where religious fundamentalists demonize
many years connected to the world wide community and wage war upon “others,” I believe we need
currency movement; Judith Lowther, a retired school secular tools to underscore our commonalities, our
principal; and Scott Finan, a printer, are also reasons interdependence and our most basic and shared
for hope. economic needs. Our local geographic communities
house a great mix of many categories of people and in
At present, Toronto Dollars can be obtained during addition to schools, community centres and places of
the week from one branch of the CIBC, from the worship, Toronto Dollar is also a vehicle for developing
restaurant, C’est What, and the Smoke and Gift Shop familiarity and perhaps even understanding. Through
in the St. Lawrence Market. On Saturdays, between the disciplined commitment of a small group of
8 a.m. and 4 p.m., volunteers exchanging Toronto people, the vision remains a small light in one corner
Dollars are located at the Toronto Dollar booth in of one city. What I seem to be learning after all these
the lobby of the market. One of the volunteers, Dr. years of labour, is that the Abundant Way is both an
Maryan Koval’s’kyj, requested a number of years inner and outer journey and its rewards for me are
ago, that a special commemorative $5 bill be printed friendship and hope.
in memory of his granddaughter, Jennifer, who was
murdered at the age of six. He has since printed Our phone number is 416 361 0466. Our address is
new “Jennifer bills” in denominations of 10 and 15 Toronto Dollar Inc., Box 6523, Station A., Toronto,
Toronto Dollars and exchanges them every Saturday Ontario, M5W 1X4. Our website is
in the lobby of the St. Lawrence Market. His efforts http://www.torontodollar.com
account for almost half of our annual exchanges of
approximately $100,000. We are at the moment,

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Complementary Currency
& Sustainability
By Alex Zorach of sustainability. Merits lose value over time through
April 13th, 2009 a demurrage fee, a fee on the holding of currency.
Greco and others, through citing the historical
T he blind acceptance of the global financial

system as merely a “neutral accounting system”
has been pointed to as a misconception and a
success of currencies that have used such fees, and
through an appeal to Gresham’s Law that “Bad money
drives out good”, has argued that such a fee not only
hurdle which needs to be overcome if humanity is to stimulates use and circulation of the currency, but
achieve the goal of sustainability.1 One aspect of the also leads to a more equitable distribution of wealth
global financial system that is often accepted without by allowing the currency to function as a medium of
questioning is the idea that economic growth is both exchange without being a long-term store of value.4,
necessary for, and synonymous with prosperity. The 8 Demurrage fees have also been pointed to as
Rocky Mountain Institute, a non-profit organization promoting long-term thinking and sustainability.10
committed to integrating entrepreneurship,
prosperity, and sustainability, has put forth a different The current financial system, with its constant drive
viewpoint, arguing not only that economic growth towards growth, creates a disincentive for sustainable
is not necessary for prosperity, but that it is often activities. For example, insulating buildings,
at odds with it. The institute argues that achieving upgrading to more energy-efficient appliances, or
sustainable development requires abandoning the generating electricity through wind or sunlight all
idea that growth is required for prosperity.2, 3 yield a certain return on investment. However, in a
growth economy, people can typically earn a higher
Thomas H. Greco, an authority on the subject of return by investing in the stock market. The average
complementary currency, makes a similar argument compounded annual return from the U.S. stock
in his book “Money: Understanding and Creating market from 1926-2000 was 10.70%11, and many
Alternatives to Legal Tender”, arguing that national sustainability-boosting investments cannot compete
currencies require continual growth by their very with this rate of return. But activities which might not
design, and that complementary currencies can be offer a competitive return on investments in dollars
designed differently so as not to require growth.4 could be very attractive when the investment is made
Complementary currencies have been proposed as in a currency such as merits that loses value over
a means of promoting sustainability and stimulating time and cannot be invested to earn a steady return.
local economies, with positive impacts for both
human welfare and the environment. 5, 6 LETS Another way in which Merit exchange promotes
(Local Exchange and Trading System), a local sustainability is to encourage the use of local goods
currency based on the idea of mutual credit, has and services; the movement to buy local is a key
been hailed as a possible way for communities aspect of the sustainability movement in the U.S.12
to counteract the negative consequences of the The fine-tuned local classifieds and the networking
globalization of capitalism.7, 8 The success of tools are designed to encourage people to work and
complementary and community currencies in times of trade with people and businesses in their immediate
economic crisis (such as Argentina’s hyperinflation) vicinity.
have demonstrated that people do not need access
to conventional money (through wealthy lenders or Together with merits, these features facilitate people
donors) in order to work to better their economic working towards sustainability through activities
situation.9 such as improving the energy efficiency of buildings,
reducing fuel usage through ridesharing, buying
Merit Exchange is a new idea within this same locally-produced goods, and possibly through
framework. Its mission, in encouraging long-term activities we haven’t even imagined yet. It is our hope
thinking and bringing prosperity to all people, is one to not only help people achieve sustainability in their

own lives, but also to make people more aware of how the global economic system shapes their decisions, so
that together, we become empowered to influence the economic system and ensure that it serves the common
good of all people.
References:
1. Stefan Brunnhuber, Alexander Fink, Jens-Peter Kuhle, “The financial system matters: future
perspectives and scenarios for a sustainable future”, Futures, Vol. 37, No. 4, May 2005, pp. 317-332.
2. Michael J. Kinsley, “Sustainable development: Prosperity without growth”, Rocky Mountain Institute,
Snowmass, Colorado, USA, (1997).
3. Michael J. Kinsley, L. Hunter Lovins, “Paying for Growth, Prospering from Development”, Rocky
Mountain Institute, Snowmass, Colorado, USA.
4. Thomas H. Greco, Money: Understanding and Creating Alternatives to Legal Tender, Chelsea Green,
Nov. 1, 2001.
5. Robert Costanza et al., “Complementary Currencies as a Method to Improve Local Sustainable
Economic Welfare”, University of Vermont, Burlington, VT, Dec. 12th, 2003.
6. David Boyle, “Sustainability and social assets: the potential of time banks and co-production”,
Grassroots Initiatives for Sustainable Development, Jun. 10, 2005.
7. Michael Pacione, “Local exchange trading systems—a rural response to the globalization of
capitalism?”, Journal of Rural Studies Vol. 13, No. 4, Oct.1997, pp. 415-427.
8. Margrit Kennedy, Transl. Claudia Vispo & Hildegarde Hannum, “Regio Complements Euro: New Paths
to Sustainable Prosperity”, Complementary Currencies in Europe, European Forum, Jul 18-22, 2004.
9. Karl Birkhoelzer, “Local Economic Development and its Potential”, Local Economic Development
Seminar, Network of Local Authorities of South-Eastern Europe, Apr. 14-15, 2005, Brcko Bosnia and
Herzegovina.
10. Bernard Lietar, Interview, “Beyond Greed and Scarcity”, Yes Magazine, Summer 1997.
11. Roger G. Ibbotson, Peng Chen, “The Supply of Stock Market Returns”, Yale School of Management,
June 2001.
12. Cohen et al., “Sustainability in the American Marketplace”, Sustainability: Science, Practice, & Policy,
Vol. 1, No. 1, Spring 2005.
http://meritexchange.com/article.php?article_id=12
http://www.opencurrency.com
Bromsgrove Principles
Statement of Belief to
represent the basis we
associate upon and which
respects our diversity.
We recognize :
1. The supply of money into the economy is the big issue which governs all the issues. The present economic
system is debt-based. This means that virtually all money is supplied to the economy as a debt to be repaid, with
interest, to the banking system. Governments rely upon the majority of people going into debt to the banking
system simply to create enough money to supply the economy. Governments, too, must borrow from the banking
system to fund public expenditure. Taxpayers must then pay back the debt and interest repayments.
2. As a consequence of this debt-based economic system, we see the indebtedness of people, families, and
countries growing daily. The present debt-based economic system perpetuates debt slavery, and this is ultimately
destructive of society, the environment, and the planet.
3. The banking system creates money out of nothing. We are concerned at the claim that there is no money
to fund vital public services, industries, and social and environmental projects, when this money at source is
created out of nothing. Governments should be able to supply money, debt-free, without having to borrow from
the banking system. “Debt-free” means that it does not have to be repaid.
4. The debt-based economic system must be challenged and alternatives constructed. The economy needs a
supply of money debt-free.
Therefore, we affirm :
1. Money must be based on the real wealth of society people, skills and materials not on debt. The supply of
money must relate to these physical facts not to the requirements of the banking system.
2. Money is the means of exchange for the goods and services produced by this real wealth. It is not a commodity
itself.
3. The purpose of an economic system is to provide goods and services as, when and where required in order
to satisfy human needs.
4. Money must be our servant not our master.
5. Money, at source, is created out of nothing, so there is no need for it to be scarce.
6. Whatever is physically possible and socially desirable can be made financially possible.
7. The present economic system can, and will, be changed for the better.
Consequently, we propose :
1. That the government via a democratically accountable authority undertakes the creation of a supply of money,
debt-free, into the economy.
2. This authority should spend, not lend, a supply of money into circulation on the basis of proven need. This will
reduce the overall burden of debt in society, break reliance upon the banking system for the supply of money,
and open potential for limitless change.
Association in the Bromsgrove Group is open to individuals and organizations which support this statement of
belief. Respect is paid to the different options for change represented by different members within this statement
of belief. The group meets once a year and regularly exchanges information, inspiration and support.
http://www.prosperityuk.com/prosperity/bromsgrove/principles.html

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Ithaca Hours Drops Print Merit Exchange to Move from
Directory in Favor of Alpha to Beta Testing
Online Listings By Alex Zorach, April 13th, 2009
http://meritexchange.com/
Ithaca Hours Shelves Print for Online Directory,
and New Projects
After two-and-a-half months of alpha testing, Merit
Exchange is ready to launch for beta testing, and will
The Board of Directors of Ithaca Hours, acting on a
launch on Saturday, April 18th. Current testers will be
course set years ago, has decided that last year’s
allowed to invite their friends to join, and these users
print Directory will be the final one. The resources put
will be gradually allowed to begin inviting new users.
into the print Directory will instead go to enhance the
online Directory, and to pursue new efforts, including
I would like to thank not only every person who has
the hiring of a staffer, and the opening of a public office,
helped test the internals of the site, but also the
perhaps with space for displays and promotions by
numerous people who helped through conversations
Hours members.
and sharing of ideas and advice.
From 1991 - 2000, Hours printed a quarterly newsletter/
During the alpha testing phase, we have implemented
directory to update member rolls. The cost and waste
a number of new features and improvements, and we
of such frequent publication led to the decision to print
have a few small celebrations:
one annual directory, saving much time, effort, money,
and paper.
• The classified search has been made more useful
and its speed greatly improved.
The downside was that members could only be added
• The site has been made much faster and more
(or removed) once per year. The Board’s thinking was
scalable.
that this limitation was the same faced by the phone
• The first merits were sent on Mar. 15th. A very
book yellow pages, so Hours could probably abide with
modest total of m150 have been traded by 5 of the
it. Besides, the work involved in the quarterly publication
testers, all in non-binding thank-you transactions.
led the Board to the conclusion that it could either run a
This amount corresponds very roughly to a dollar
currency system, or publish a quarterly newsletter, but
value of about $55 worth of favors that users
not both.
have provided for each other.
• The mechanism for automatic regulation of the
The annual print Directory was less work, but still
supply of the merits currency was put into place
expensive, inefficient, and wasteful. Like the quarterly
starting Monday, Apr. 6th.
newsletter/directory, it must be entirely replicated even
• A number of bugs have been fixed and small
when there are few changes. And whatever changes
cosmetic changes made to both the private and
there are cannot be made in a timely way. The Board
public parts of the site.
always had the idea that eventually an online Directory
would be the sole Directory. Our concern, back in
The end of alpha testing is only the beginning. While
2000, was that many people were not connected with
the core features of Merit Exchange for individuals have
online capacity. We foresaw a day when that would
fallen into place, we anticipate continually growing and
change. Now, it has. The price of personal computers
changing to accommodate the needs of our community
has dropped significantly in that time. Online access is
and carry out our challenging mission of bringing
free and readily available at the library.
prosperity to all people.
The Board is planning to have some type of printed
We have also only begun to create the framework for
material for promotion of Hours. It will most likely be in
businesses to use Merit Exchange, and the features to
the form of a brochure. It will be designed with maximal
allow users to publish public content for the whole web
lifespan in mind.
to see.
Stephen Burke
Stay tuned...we are evolving quickly and hopefully
for the Ithaca Hours Board
these features will arrive very soon!
http://www.ithacahours.org/2009/05/hours-shelves-
http://meritexchange.com/
print-directory-for.html
The Pennsylvania 1 dollar = 7 shillings 6 pence. The continental currency
was replaced by the U.S. dollar at a rate of 1000
continental dollars = 1 U.S. dollar in 1793.
Pound?
from Wikipedia Benjamin Franklin
Benjamin Franklin helped create the Pennsylvania
The pound was the currency of Pennsylvania until 1793. Scrip, and in his autobiography he wrote of this
Initially, the British pound and certain foreign coins currency:
circulated, supplemented from 1723 by local paper
money, called Colonial Scrip. Although these notes The utility of this currency became by time and
were denominated in pounds, shillings and pence, they experience so evident as never afterwards to be
were worth less than sterling, with 1 Pennsylvanian much disputed
shilling = 9 pence sterling.
Franklin believed the shutting down of this paper money
The Pennsylvania version of this currency was said to be by Parliament in 1764 was the principal cause of the
the most effective, because they controlled the money American Revolution, as did many other prominent
supply and issued only enough notes so as to satisfy Americans. Peter Cooper, founder of Cooper Union
the demands of trade, preventing inflation. In 1938, Dr. College, Vice-President of the New York Board of
Richard A. Lester, an economist at Princeton University, Currency, US Presidential Candidate in 1876, and
wrote that “The price level during the 52 years prior to one-time colleague of Secretary of the Treasury Albert
the American Revolution and while Pennsylvania was Gallatin said in his 1883 book Ideas for a Science of
on a paper standard was more stable than the American Good Government:
price level has been during any succeeding fifty-year
period.” Pennsylvania established a “land bank” that After Franklin had explained…to the British
allowed landowners to borrow scrip with their land as Government as the real cause of prosperity, they
collateral. They could borrow twice the value of their immediately passed laws, forbidding the payment
land, half of it representing actual land value, and the of taxes in that money. This produced such great
other half representing production potential of the land. inconvenience and misery to the people, that it
The loan was to be retired over a set period of years, was the principal cause of the Revolution. A far
with the land ownership being restored to the citizen greater reason for a general uprising, than the
upon payment. When the loan was fully retired, another Tea and Stamp Act, was the taking away of the
loan could be taken out. paper money.
In March 1723, it issued Colonial Scrip, paper bills of Adam Smith

credit to the amount of $60,000, made them a legal Adam Smith wrote of the Pennsylvania currency in his
tender in all payments on pain of confiscating the debt or famed 1776 work The Wealth of Nations:
forfeiting the commodity, imposed sufficient penalties on The government of Pennsylvania, without
all persons who presumed to make any bargain or sale amassing any [gold or silver], invented a
on cheaper terms in case of being paid in gold or silver, method of lending, not money indeed, but
and provided for the gradual reduction of the bills by what is equivalent to money to its subjects. [It
enacting that one-eighth of the principal, as well as the advanced] to private people at interest, upon
whole interest, should be paid annually. Pennsylvania [land as collateral], paper bills of credit…made
made no loans but on land security or plate deposited transferable from hand to hand like bank notes,
in the loan office, and obliged borrowers to pay 5 % and declared by act of assembly to be legal
for the sums they took up. The scheme worked so tender in all payments...[the system] went a
well that, in the latter end of the year, the government considerable way toward defraying the annual
emitted bills to the amount of $150,000 on the same expense…of that…government [low taxes].
terms. In 1729 there was a new emission of $150,000 [Pennsylvania’s] paper currency…is said never
to be reduced one-sixteenth a year. Pennsylvania was to have sunk below the value of gold and silver
one of the last – if not the very last – colonies that which was current in the colony before the…
emitted a paper currency. In 1775, the Colonial “Scrip” issue of paper money.
currency was replaced by Continental currency. The
Commonwealth of Pennsylvania issued Continental http://en.wikipedia.org/wiki/Pennsylvania_pound
currency denominated in £sd and Spanish dollars, with http://en.wikipedia.org/wiki/Colonial_scrip

Stamp Scrip: spend it, and businesses to accept it? How to keep
its value stable? The approaches that different scrip
Money People Paid to Use issuers have taken to address these considerations
have been varied and instructive.
Federal Reserve Bank of Cleveland. More scrip was issued during the Great Depression in
Economic Commentary, the 1930s than ever before (or since). One particular
Apr 2008 by Champ, Bruce variety tried during the time, stamp scrip, was unusual
in that people actually had to pay a fee to use it. In
Substitutes for government-issued money are produced other countries, people had tried stamp scrip schemes
and used from time to time even in countries like the with success, but in the United States, stamp scrip
United States. Understanding why people turn to these proved less useful. The one aspect of stamp scrip that
substitutes and to what degree they are successful-or might make it seem so unworkable to many people-the
not-can teach us a lot about the elements essential to fee to use it-is not the naïve idea of a quaint era but
a well-functioning currency. one that surfaced again very recently, when ways of
conducting monetary policy in times of extremely low
Imagine you just want a cup of coffee. It’s only $1.25, nominal interest rates were a pressing concern. In this
but you have no cash in your wallet. They don’t take Commentary, we examine why stamp scrip arose, its
checks. They don’t take credit cards. Cash only! Or... successes and failures, and lessons we can learn from
the last bus out of town leaves in 5 minutes. You have its issuance.
no change for the $1.75 fare, and it’s 16 miles home.
An Era of Scarce Cash
Ever been there? While such cash-poor moments Throughout the Great Depression, bank failures,
happen less frequently in our modern age of credit bank runs, and bank suspensions were common and
cards, gift cards, prepaid store cards, and debit cards, caused or exacerbated cash shortages. Bank runs
each of us has probably lived through a few times where occurred when a bank’s customers became concerned
the absence of cash on hand was a big inconvenience. about the soundness of the bank (bank deposits were
Throughout the history of our country, there have been not yet covered by deposit insurance), and arrived at
many times where shortages of cash were so severe the bank in large numbers to withdraw their deposits.
they made life difficult for a lot of people-and hindered Since banks kept only a fraction of deposits in liquid
the smooth operation of the economy. assets, their reserves could easily be wiped out during
a run. To prevent the depletion of reserves, banks
It’s interesting to explore the ways people have often partially or completely suspended the payment of
responded to such shortages of cash in the past. deposits. Doing so allowed them to buy time in order
Their resourcefulness is always impressive, and the to liquidate assets but of course, customers could not
strategies they used tell us a lot about the importance get cash if they needed it. People also hoarded cash,
of money to an economy and the value people place making the shortages worse.
on having an effective medium of exchange.
In March 1933, unemployment rates in the United States
One frequent response to cash shortages has been reached 25 percent. Household incomes had fallen in
to create a local substitute currency, which we call nominal and real terms for three consecutive years.
scrip. Scrip has been issued off and on in the United Bank suspensions had spread across the country, and
States by different kinds of entities-private companies President Roosevelt made the suspension of payments
like coal mines and railroads, city governments, and official by declaring a national bank holiday, which
civic organizations, among others-and for a number lasted ten days.
of reasons, not just to overcome liquidity shortages.
Every scheme to introduce scrip has involved the same In response to cash shortages, issues of scrip began
considerations faced by the U.S. government when it to appear. These took many forms. Some scrip was
planned how to provide a useful currency for citizens and payable in goods or services. Other scrip represented
came up with the Federal Reserve System and Federal claims to bank deposits, which could be redeemed
Reserve notes-our U.S. dollars. What denominations once a bank ended a suspension.
will be handy? What forms of paper and metal will be
most convenient? How to prevent counterfeiting? How Stamp scrip, sometimes called coupon scrip, arose
to encourage workers to be paid with it, consumers to in several communities. It was denominated in

dollars, in denominations from 25 cents to $5, with use today in Ithaca, New York, that exists for the same
$1 denominations most common. Stamp scrip often purpose.) Aside from the general slowdown in business
became redeemable by the issuer in official U.S. dollars caused by the Depression, local merchants were
after one year. also concerned about the growth of big chain stores.
They saw locally issued scrip as a way of thwarting
What made stamp scrip unique among scrip schemes “the growing menace of chain-store competition,” as
was a series of boxes on the reverse side of the note. the scrip historian Joel W. Harper put it, and for that
Stamp scrip took two basic forms-dated and undated reason merchants could be persuaded to accept it.
(often called “transaction stamp scrip”). Typically, 52 The idea of using scrip to stimulate spending is one of
boxes appeared on the back of dated stamp scrip, one the reasons people chose to issue stamp scrip rather
for each week of the year. In order to spend the dated than other kinds of scrip. Other scrip, which did not
scrip, the stamps on the back had to be current. Each require the use of stamps to spend (and involved no
week, a two-cent stamp needed to be purchased from hot-potato scenario), would not have given consumers
the issuer and affixed over the corresponding week’s the same incentive to spend. The other advantage of
box on the back of the scrip. Over the coming week, stamp scrip was the automatic means it provided for
the scrip could be spent freely within the community. redeeming it. For this reason, people often referred to it
Whoever was caught holding the scrip at week’s end as “self-liquidating money.” Note that since the ultimate
was required to attach a new stamp before spending redemption of stamp scrip and the costs associated
the scrip. In this scheme, money became a hot potato, with its issue were financed by the users of the scrip,
with individuals passing it quickly to avoid having to the issuer earned 100 percent of the seigniorage. For
pay for the next stamp. example, a municipality that paid for labor services
with stamp scrip received those services at basically
Undated scrip also had boxes on the back, but there zero cost.
were no dates associated with the boxes. Each time
the scrip was to be spent, a new stamp had to be The Origins of Stamp Scrip
placed in a box on the back. This was normally done The idea of using scrip to stimulate spending dates
in front of the seller, and both parties signed the newly back to the 1890s, when Silvio Gesell wrote a series of
affixed stamp. books related to monetary system reform. He claimed
that since money held its nominal value over time,
In either of its forms, the scrip could be redeemed at there was little reason to be in a hurry to spend it. This
the issuer once the boxes were completely filled with encouraged people to hoard money during periods of
stamps-the issuer took the scrip and gave back dollars financial stress. Gesell, following a suggestion made
equivalent to the scrip’s denomination. If the issuer by Swiss merchant George Nordman, argued that a
had kept the proceeds of the stamp sales throughout “carrying tax” on money could prevent hoarding.
the year (which didn’t always happen), there would be
enough funds set aside to fully redeem the scrip, with a Gesell suggested that a periodic tax placed on money
little extra to cover the costs of operating the scheme. could do the trick. By making it costly to hold money,
Often, 4 cents extra on the dollar was built into the he believed people would be encouraged to spend it.
pricing for this purpose. In a severe depression, the idea that spending could
be stimulated by making money costly to hold seemed
Stamp scrip was issued by municipalities, civic appealing. In fact, Gesell’s views received the stamp
organizations, business organizations, and individuals. of approval of the renowned economist John Maynard
Municipalities issued stamp scrip as a source of Keynes in his General Theory.
revenue. The Great Depression caused an erosion in
taxpayer income, an increase in taxpayer delinquency Keynes viewed stamp scrip as a possible solution
rates, and even tax strikes in some communities. to what has been referred to as a “liquidity trap”-a
All of these took their toll on municipal revenues. situation where interest rates are so low in an economy,
Municipalities could make up the shortfall by making that no one cares to hold interest-bearing assets. By
purchases and paying workers with stamp scrip. Civic establishing a carrying tax on money, the nominal
organizations issued scrip to promote employment and rate of return on money could be lowered, creating an
various civic projects. incentive for people to hold interest-bearing assets,
which might stimulate greater production across the
Issuing scrip was also viewed during the 1930s as a way economy.
to encourage local spending. (In fact, there is a scrip in

Successes and Failures However, stamp scrip issues were not widespread, nor
Some early, apparently successful, stamp scrip was any U.S. issue large. (There were far more issues
implementations inspired by Gesell’s ideas occurred of scrip that did not have the stamp feature. Many of
in Germany and Austria in the 1930s. Both countries these were successful.) Harper, in his unpublished
were experiencing deflation, commercial bank failures, 1948 Ph.D. thesis about the scrip of the 1930s,
and high unemployment, much like the United States found 95 specific issues of stamp scrip by 37 cities,
at the time. 8 counties, and numerous business groups. Most of
the stamp scrip issues were of the undated variety;
The German experiment occurred in the town of Harper found only two instances of dated stamp
Schwanenkirchen, where a stamp scrip called Wära scrip schemes. Furthermore, most of the issues were
was issued. It received attention in the United States small, the majority being between $300 and $500, and
through numerous newspaper and magazine articles, no issue above $2,000 was successful. The largest
including one by Hans R. L. Cohrssen that appeared municipal issue ($120,688) was in Polk County, Iowa,
in The New Republic in August 1932. He reported that but it ultimately failed.
in 1931 the owner of a coal mine that had been closed
for a couple years borrowed 40,000 Reichsmarks and In 1933, the famous economist Irving Fisher wrote a
approached miners about being paid in Wära and local small monograph entitled Stamp Scrip, in which he
merchants about accepting it. Merchants were at first extolled the virtues of this medium of exchange. Fisher
hesitant, but soon supported the scrip. By Cohrssen’s believed that stamp scrip could be used to encourage
account, the plan was successful. The 1 percent per spending. In fact, he claimed it could “break the back
month tax on the scrip appeared to encourage its of the Depression.” As early as October 1932, Fisher
rapid circulation. Cohrssen called it the “miracle of began to push for a nationwide issue of dated stamp
Schwanenkirchen.” scrip. A bill he crafted was introduced in Congress by
Senator J.H. Bankhead of Alabama on February 17,
Ultimately, Wara was accepted in thousands of stores 1933, as an amendment to another act. It proposed a
in Germany, and a few banks actually created accounts nationwide issue of up to $1 billion in $1 dated stamp
denominated in it. But eventually the scrip was declared scrip. The scrip would be declared legal tender, a feature
illegal by the German Ministry of Finance. the local scrip issues could not achieve. The bill never
came to a vote. Senator Bankhead and other members
In Austria, stamp scrip was issued in the town of of Congress subsequently introduced other similar bills
Wörgl in August 1932 to finance a number of public (including one where the Fed would issue stamp scrip).
works projects. Accounts of the episode indicate it had None of these attempts met with success.
some success. However, as in Germany, the Wörgl
experiment was short-lived. An Austrian court forbade Problems with Stamp Scrip
its issuance in November 1933. Launching and keeping a scrip issue viable requires
coordination, cooperation, sound design, and good
The U.S. experience with stamp scrip began in the planning, and those who have attempted it in the
small town of Hawarden, Iowa, in 1932. Hawarden’s U.S. have met with many difficulties. Harper, who
scrip strayed from Gesell’s original suggestions in that had canvassed hundreds of communities that had
it was undated. To spend this kind of scrip, customers experimented with scrip during the 1930s, observed
had to buy a stamp at the time they were making their that “the effort required to maintain the use of local
purchase and affix it to the scrip. Dating was intended scrip seems to have been greater than the results, with
to encourage rapid turnover of the scrip, but undated the exception of a considerable number of municipal
scrip served in effect as a tax on consumption. issues.” The successful schemes he alluded to used
standard scrip, while most of those that used the stamp
Many towns in the United States issued stamp scrip. feature failed.
Most scrip was issued in early 1933, when bank
suspensions were frequent and widespread. The One ofthe common problems associated with any scrip
state legislatures of North Carolina, Indiana, Michigan, issue was simply getting the schemes off the ground.
Tennessee, New Jersey, Ohio, and North Dakota People accept a form of money in payment because
passed laws allowing localities in their respective states they believe it will be accepted in future exchange. But
to issue stamp scrip. Statewide stamp scrip issue was often, businesses were reluctant to agree to accept
proposed in Iowa but never enacted. scrip. Without such agreement, workers often refused
to be paid in it. If a community could coordinate on the

acceptance of scrip, the scheme typically met with at nominal interest rates-interest rates cannot be pushed
least limited success. Even then, scrip was local in lower than zero. The zero-bound problem exists
scope. At best, it circulated only in the community of because money pays zero nominal interest. The power
issue. of interest rate policy as used by central banks to affect
the economy is exhausted at the zero bound.
Most U.S. stamp scrip was of the undated variety, which
meant it had no mechanism to keep it circulating, as Marvin Goodfriend suggested several options for
dated scrip was expected to do. Workers recognized overcoming the zero bound. One involved a carry tax
undated stamp scrip as the tax on consumption that on money. By taxing money, its nominal return would
it was and refused to use it. It is puzzling why the become negative, allowing the Fed more leeway to
dated stamp scrip schemes successful in Austria and push interest rates to negative values. Stamp scrip is
Germany were not mimicked more often in the United an interesting historical example of money bearing a
States. In fact, Fisher criticized the widespread use of carry tax.
undated scrip in this country.
Milton Friedman andAnna Schwartz, in their monumental
Only dated stamp scrip was expected to keep money A Monetary History of the United States, 1867-1960,
circulating. With weekly stamps, it should have turned criticized the Federal Reserve for its actions during
over at least once per week. Dated stamp scrip was the Great Depression. Had the Fed created sufficient
used to such a limited extent in the United States that liquidity during the banking crises of the 1930s, it is
its impact on the speed of money’s circulation (referred difficult to believe that extraordinary measures, such
to as velocity) is sketchy. Stamp scrip issued in Mason as the issuance of stamp scrip by municipalities and
City, Iowa, which combined the dated and undated others, would have been necessary.
features, was “scarcely moving more than once a week
on the average,” according to civic leaders contacted by Recommended Reading
Harper. Evanston, Illinois, reported an average velocity • “Overcoming the Zero Bound on Interest Rate
of four times per week over a short period. Stamp scrip Policy,” by Marvin Goodfriend. 2000. Journal of
issued by Russell, Kansas, and Rock Rapids, Iowa, Money, Credit, and Banking, vol. 32.
changed hands roughly twice a week. While it’s difficult • “Scrip and Other Forms of Local Money,” by Joel
to find comparable statistics, most economists believe William Canaday Harper. 1948. Ph.D. dissertation,
that the velocity of official U.S. money was much lower University of Chicago.
around this time. • Stamp Scrip, by Irving Fisher. 1933. New York:
Adelphi.
Lessons from Stamp Scrip Bruce Champ is an economic advisor at the Federal
The U.S. experience with stamp scrip illustrates the Reserve Bank of Cleveland. The views he expresses
importance of a well-functioning medium of exchange. here are his and not necessarily those of the Federal
People are willing to tolerate quite a bit merely to have Reserve Bank of Cleveland or the Board of Governors
something they can use to make transactions with. But of the Federal Reserve System or its staff.
the difficulty of using stamp scrip probably led to its
downfall-such troublesome money was not likely to last Economic Commentary is published by the Research
when other kinds of money became readily available Department of the Federal Reserve Bank of Cleveland.
again. As money has evolved over time, it has changed Economic Commentary is also available on the
form in ways that lowered the transactions costs Cleveland Fed’s Web site at
associated with using it, and stamp scrip ran counter http://www.clevelandfed.org/research
to that trend.
Copyright
History gives us some appreciation for what an Federal Reserve Bank of Cleveland Apr 2008
accomplishment our current system of money is. But the View more issues:
lessons of stamp scrip extend to more modern concerns Champ, Bruce “Stamp Scrip: Money People Paid to
as well. Earlier this decade, the Federal Reserve was Use”. Federal Reserve Bank of Cleveland. Economic
confronted with a situation that had not occurred since Commentary. . FindArticles.com. 01 Sep. 2008.
the late 1950s. Interest rates had fallen to extremely http://findarticles.com/p/articles/mi_qa5294/is_20080401/
low levels. Policymakers became concerned that some ai_n27898918
aspects of monetary policy might become ineffective at
low interest rates. This is because of the zero bound on

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The first step for any community aiming to become more self-reliant is to establish its own currency system.

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Support Kiva Editor, Mark Herpel

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Ultimately what makes a town or city

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K iva.org is a non-profit that is revolutionizing the fight against global poverty

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T he blind acceptance of the global financial

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In March 1723, it issued Colonial Scrip, paper bills of Adam Smith

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36 § Community Currency Magazine May 2009 Issue

Community Currency Magazine May 2009 Issue § 37